Slide 1: 2024 Q2 Earnings Call Presentation
2024 Q2 Earnings Call Presentation Linda Hasenfratz, Executive Chair Jim Jarrell, CEO & President Dale Schneider, CFO August 8th, 2024 For Audio Only Dial In: North America: (888) 259-6580 International: (416) 764-8624 Conference ID: 60435601
Slide 2: Forward Looking Information, Risk and Uncertainties
Forward Looking Information, Risk and Uncertainties Certain information regarding Linamar set forth in this presentation and oral summary, including management’s assessment of the Company’s future plans and operations may constitute forward-looking statements. This information is based on current ex
Slide 3: Linda Hasenfratz, Executive Chair
Linda Hasenfratz, Executive Chair © Linamar Corporation 3
Slide 4: Jim Jarrell appointed Chief Executive Officer & President
Agenda Jim Jarrell has been appointed Chief Executive Officer & President Effective August 8, 2024 © Linamar Corporation 4
Slide 5: Quarter Highlights
Quarter Highlights
Slide 6: Quarter Highlights
Agenda Quarter Highlights ▪ Excellent quarter financially with continued strong double-digit growth ▪ Market share growth across all businesses ▪ CPV up in every region ▪ Great continued market share growth in core scissors globally at Skyjack ▪ Great continued market share growth in core combine dr
Slide 7: Financial
Financial
Slide 8: Financial Highlights Q2 2024
Agenda Financial Highlights Q2 2024 ▪ Double Digit Top & Bottom-Line Growth ▪ Sales $2.85 Billion, up 12% ▪ Normalized EPS1 $3.06, up 17% ▪ Net Normalized Margin2 Expansion vs Prior Year Reached 6.6% ▪ Excellent Mobility Segment Earnings Growth of 59% and Margin Growth to 6.4% 1 - Net Earnings (Loss
Slide 9: Mobility Normalized Earnings and Margins
Mobility Normalized Earnings and Margins (in millions CAD) 140 6.5% 120 5.5% 100 4.5% 80 3.5% 60 2.5% 40 1.5% 20 0.5% - -0.5% Q3 2023 Q4 2023 Q1 2024 Q2 2024 OE - Normalized OE - Normalized Margin Linear (OE - Normalized) 1 – Operating Earnings – Normalized is a non-GAAP financial measure. Operating
Slide 10: Financial Highlights
Financial Highlights 11,000 10,000 Sales Income Statement (in millions CAD) 9,000 8,000 7,000 Q2 2024 Q2 2023 %Δ TTM2 2024 TTM2 2023 %Δ $ Millions 6,000 5,000 Sales 2,848.7 2,552.8 11.6% 10,458.7 9,003.6 16.2% 4,000 3,000 2,000 NE – Normalized1 188.4 160.8 17.2% 606.5 503.0 20.6% 1,000 0 NE – Normal
Slide 11: Financial Highlights: Free Cash Flow and Capex
Financial Highlights 700 Consistent Positive Free Cash Flow Cash Flow and Investment (in millions CAD) 600 Q2 2024 Q2 2023 TTM2 2024 TTM2 2023 500 400 $ Millions Free Cash Flow1 67.1 56.1 (13.0) 180.3 300 200 Capital Expenditures (Capex) 174.0 205.4 758.4 605.8 100 Capex as a % of Sales 6.1% 8.0% 7.
Slide 12: Markets and Market Outlook
Markets and Market Outlook © Linamar Corporation 12
Slide 13: Market Snapshot
Market Snapshot Mobility: ▪ 2024 global light vehicle production expected to be down Light Commercial Light Commercial 2024 Vehicle Truck Agriculture Access 2025 Vehicle Truck Access 2%, modest growth expected in 2025 ▪ Strong launch book and market share growth continues to support mobility segment
Slide 14: Jim Jarrell, Chief Executive Officer & President
Agenda Jim Jarrell Chief Executive Officer & President © Linamar Corporation 14
Slide 15: Navigational Journey Filled with Promising Opportunities
Navigational Journey Filled with Promising Opportunities 15
Slide 16: Mobility: Move the World
MOBILITY MOVE THE WORLD
Slide 17: Content Per Vehicle (CPV)
Content Per Vehicle2 (CPV) Q2 2024 Q2 2023 % Change ▪ Global CPV up again North America 283.06 238.43 18.7% ▪ CPV up in every region Europe 101.24 100.10 1.1% Asia Pacific 11.03 10.33 6.8% Global CPV1 85.73 76.27 12.4% Annual Global CPV, except Q2 2024 58.85 61.58 70.80 75.22 85.73 2020 2021 2022 20
Slide 18: Mobility Launches
Mobility Launches 3.50 Launching nearly $3.1 Billion of new work today 3.00 2.50 CAD (Billions) 2.00 1.50 1.00 0.50 0.00 2023 2024 2025 2026 2027 Incremental Growth from Launches $500 to $600 Million in 2024 $700 to $900 Million in 2025 Updated: August 2024 © Linamar Corporation 18
Slide 19: Flexibility of Linamar Mobility's Asset Base
Flexibility Of Linamar Mobility’s Asset Base 16% Dedicated or Special Purpose Capital Equipment 84% Flexible & Redeployable Capital Equipment © Linamar Corporation 19
Slide 20: Mobility: Strategy & Operations Highlights
Agenda Mobility: Strategy & Operations Highlights Highlights ▪ Integrations of Dura-Shiloh and Mobex Global near full completion ▪ Using the new technologies and expanded portfolio Projected 2028 Sales for Light Vehicles by Propulsion Type & System ▪ More than $150M of New Business Wins this quarter
Slide 21: Industrial: Skyjack - Build the World
INDUSTRIAL: SKYJACK BUILD THE WORLD
Slide 22: Q2 Market Share Increase: Total AWP
Agenda Q2 Market Share1 Increase: Total AWP Industrial: Strategy & Operations Highlights Last Rolling 4 Quarters 6 Months YTD vs. 2023 Q2 2024 vs. Q2 2023 1 – Market Share represents Skyjacks total Addressable Markets. © Linamar Corporation 22
Slide 23: Industrial: Strategy & Operations Highlights
Agenda Industrial: Strategy & Operations Highlights Highlights Launched new battery electric ‘eBOOM’ product Industrial: Strategy &▪ Operations Highlights range of Zero Emissions articulating booms in both Europe and Australia ▪ Planned roll out of further ZEV Electrified product will continue over
Slide 24: Industrial: Agriculture - Feed the World
INDUSTRIAL: AGRICULTURE FEED THE WORLD .
Slide 25: The Ag Strategy Now Addresses the Entire Crop Production Cycle
The Ag Strategy Now Addresses the entire Crop Production Cycle Linamar has become a leader in premium short-line agriculture equipment and now with the acquisition of Bourgault provides a full suite of product offerings addressing all segments of the broad acre crop production cycle © Linamar Corpor
Slide 26: Agricultural: Strategy & Operations Highlights
Agenda Agricultural: Strategy & Operations Highlights Highlights ▪ Linamar Agriculture Strategy is well underway ▪ Bourgault Integration progressing very well. Synergies in product distribution across brands ▪ New MacDon 61’ FD261 product announced for Australian market. Attaching to new Class 10 OE
Slide 27: Bourgault Dominates!
Bourgault Dominates! Source: Dealer Survey Reveals Winners & Losers Among Equipment OEMs (farm-equipment.com), August 5th 2024. © Linamar Corporation 27
Slide 28: Financial Review, Dale Schneider, CFO
Financial Review Dale Schneider, CFO Linamar Corporation 28
Slide 29: Industrial Sales, Earnings, and Margins
Industrial Sales, Earnings, and Margins (in millions CAD) Industrial Sales increased by 14.1% or $109.3 to $886.6 Q2 2024 Q2 2023 ▪ The Sales were helped by: Finance ▪ the additional sales from the acquisition of Bourgault; Sales 886.6 777.3 ▪ volume increases due to market share gains in worldwide
Slide 30: Mobility Sales, Earnings, and Margins
Mobility Sales, Earnings, and Margins (in millions CAD) Mobility Sales increased by 10.5% or $186.6 to $1,962.1 Q2 2024 Q2 2023 ▪ The Sales were helped by: ▪ the additional sales from our Linamar Structures acquisitions in 2023; and Sales 1,962.1 1,775.5 ▪ the increasing volumes on launching program
Slide 31: Operating Expenses
Operating Expenses (in millions CAD) Q2 2024 Q2 2023 +/- % ▪ Gross Margin was $424.8 in the quarter and was impacted primarily by the Sales 2,848.7 2,552.8 295.9 11.6% same factors that impacted each business segment. (See the previous two slides) Cost of Goods Sold 2,423.9 2,190.9 233.0 10.6% ▪ Amo
Slide 32: Finance Expenses & Income Tax
Finance Expenses & Income Tax (in millions CAD) ▪ Finance expenses increased by $21.9 Q2 2024 Q2 2023 +/- ▪ Finance expenses were hurt by: ▪ the new private placement notes issued in June 2023 to fund the Linamar Structures Finance Expense 37.3 15.4 21.9 acquisitions; ▪ the new term credit facility
Slide 33: Leverage
Leverage (in millions CAD) ▪ Cash position at the end of the quarter was $759.9, which was an increase of Q2 2024 Q2 2023 $106.6 from the end of 2023. Cash Position 759.9 1,375.8 ▪ Linamar generated $236.0 in Cash from Operating Activities being used primarily to fund Q2 capital expenditures. Availa
Slide 34: Financial Summary
Financial Summary ▪ Double-Digit Sales growth in both Industrial and Mobility ▪ Overall, sales up 11.6% for Q2 2024 compared to Q2 2023; ▪ Improving performance in both segments; ▪ Industrial Sales up by 14.1%; and ▪ Mobility sales up $186.6 million or 10.5% for the quarter. ▪ Double-Digit Normalize
Slide 35: Outlook
Outlook © Linamar Corporation 35
Slide 36: Outlook
Outlook Consolidated Normal Ranges 2023 Actuals 22.9% Expectations 2024 Double Digit Growth Expectations 2025 Continued Growth Sales Growth Q3 2024 Expectations 1 40.3% Double Digit Growth Continued Double Digit Growth Normalized EPS Growth ▪ Mobility Normalized Net Margin 1 7.0% - 9.0% 5.6% Modest
Slide 37: Question and Answer
Question and Answer © Linamar Corporation 37
Slide 38: Outlook
Outlook Consolidated Normal Ranges 2023 Actuals 22.9% Expectations 2024 Double Digit Growth Expectations 2025 Continued Growth Sales Growth Q3 2024 Expectations 1 40.3% Double Digit Growth Continued Double Digit Growth Normalized EPS Growth ▪ Mobility Normalized Net Margin 1 7.0% - 9.0% 5.6% Modest
Slide 39: Key Messages
Key Messages CEO Succession Double Digit Top and Bottom-Line Growth Delivered Again, On Track for a Record Year Stellar Growth of Mobility Segment in Earnings and Margin Continues © Linamar Corporation 39
Slide 40: Thank You
Thank You www.linamar.com © Linamar Corporation 40
Slide 41: Appendix: Supplemental Materials
Appendix: Supplemental Materials © Linamar Corporation 41
Slide 42: Linamar's Powerful Synergistic Diversification Model
Linamar’s Powerful Synergistic Diversification Model Cash for Continued Brand Investment Management MOBILITY The Power of a Balanced & Diversified Business Model SEGMENT INDUSTRIAL Consistent Strong, Stable Sustainable Strong Profit SEGMENT Margins Free Cash Flow Balance Sheet Consistent Growth Supp
Slide 43: Linamar Consistently Delivers, Year After Year
Linamar Consistently Delivers, Year After Year Note: Years in which Double Digit Growth in Sales or Normalized Net Earnings is denoted by a star. 1 - Free Cash Flow (FCF) and Net Earnings (NE) – Normalized are Non-GAAP Financial Measures. Please refer to “Non-GAAP and Other Financial Measures” in th